Employee benefits: Advantages for people with disabilities and caregivers

Benefits can be a key element of employee satisfaction. A recent study by Voya Cares and research firm LRW found that, overall, 87% of employees say that benefits are an important reason they stay at their company, and 90% say that benefits are equally as important to them as a higher salary.¹

People may procrastinate when it comes to selecting employee benefits, an understandable reaction to large amounts of information that is peppered with jargon and numbers. In fact, a recent poll of 1,227 U.S. workers found that nearly half (49 percent) spend 30 minutes or less reviewing their benefits prior to enrollment.² The process deserves more than 30 minutes of attention — especially if you or someone in your family has a disability or special needs or is a caregiver, because many benefits available through your employer may be challenging to get on your own.

Typical employee benefits

Looking at the variety and breadth of benefits offered through employers, it’s no wonder the process can be considered a confusing one. “Benefits packages vary from employer to employer,” explains Rebecca Winters, Employee Benefits senior voluntary product manager at Voya Employee Benefits. “But the core benefits most frequently offered by companies are medical, dental, and vision coverage, life insurance, disability income insurance, health or flexible savings accounts, and retirement savings plans. Companies may also offer Employee Assistance Programs that address a broad set of issues affecting mental and emotional well-being.”

Because these benefits can vary a great deal, it’s important to thoroughly read the information your employer provides, and if you have questions, ask someone in your company’s employee benefits department.

Let’s look at some of the advantages of these key employee benefits for an eligible employee or family member with a disability or special needs.

Medical, dental, vision

These medical benefits are the most desired among employees, according to a Harvard Business Review article. You may be able to choose from a variety of plans and can purchase coverage for your dependents, as well.

It’s important to carefully review covered services to be sure treatments, therapies, medical equipment and adaptations for your or your dependent’s diagnosis are included. Weigh deductibles and co-payment amounts against premium payments to see if a high-deductible plan would be more cost effective than a managed-care-type plan that may have lower deductibles and co-payments but higher monthly premiums.

Ask yourself:

• Does your employer offer critical care insurance? This coverage is useful if you experience such unexpected covered illness or condition such as a heart attack, stroke, or cancer. Critical illness coverage could include a health advocacy program that can help you find products, services, and answers to questions you may have. “It’s the extra support you may need to help you navigate your way,” says Winters. It’s important to note that critical illness insurance is a limited benefit policy. It is not health insurance and does not satisfy the requirement of minimum essential coverage under the Affordable Care Act.
• What’s your past history regarding dental and vision care? Is it more cost effective to pay for occasional care out of your own pocket than for premiums for insurance coverage that you may not fully use?

Health and flexible savings accounts

A 2019 study published in the American Journal of Public Health states that 66.5 percent of all bankruptcies were tied to medical issues — either because of high costs for care or time out of work.

Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) can help pay for unexpected medical costs by allowing you to set aside pre-tax income to pay eligible medical expenses, while reducing your annual tax burden, which can be a useful benefit for people with disabilities and caregivers. In essence, the tax savings help your money go farther. The eligibility requirements, use of the funds, and whether or not the funds saved in one year can be rolled over to the next vary by type of account.

Ask yourself:

• If your medical costs are minimal now, could they rise in the future? Money in an HSA is yours to keep over time. If you leave your employer, you can keep the account or roll the funds into an HSA with a future employer. (Note: FSAs do not allow your savings to roll over into a new plan year. In essence, it’s a “use-it-or-lose-it” account.) And you can name a beneficiary to inherit the funds in your active HSA when you pass away. (See the next section for more about beneficiaries.)

Life insurance

Because getting life insurance protection can be challenging for people with disabilities to obtain on their own, these benefits available through your employer may be a great opportunity to obtain them with no or limited underwriting.

Your employer may offer basic life insurance, which is the amount they provide at no cost to you. You may also have the option to elect additional coverage called Supplemental Life Insurance. During your initial enrollment with your employer, specific coverage amounts often are available to purchase without any medical underwriting questions. It is helpful to take advantage of these guaranteed-issue amounts when you have them available to you, as electing coverage after your initial enrollment may require medical history questions or additional underwriting. In that situation and when evidence of insurability is required, the insurance company will need to approve it before coverage becomes effective.

Ask yourself:

• Is the policy portable? If so, when you leave your employer, you can continue to pay the premium directly to the insurer and keep the coverage.
• Does the coverage include a waiver of premium? If you can’t work because of a short- or long-term disability, this waiver keeps your policy active with no premium payments due.
• Should you purchase life insurance for a dependent (spouse/domestic partner or children)?
• Life insurance benefits may be used however the beneficiary elects so it’s important to consider such things as who would provide caregiving services, if you or a spouse were to pass away? “Hiring a caregiver to replace a spouse or partner who stays home to care for a child with special needs can be costly. Life insurance may provide the funds to assist with that,” says Jonathan R. Kurtz, a Voya financial advisor with Kurtz, Connor, Browning & Phillips, LLC, in Virginia, who is experienced in offering financial services to families with special needs.
• Who will you name as beneficiary? For family members with a disability or special needs, receiving life insurance proceeds may make them ineligible to qualify for government benefits,” warns Kurtz. “Consider naming a special needs trust as the beneficiary instead.”

Disability income insurance

Disability income insurance will pay a percentage of your salary if you can’t work because of an illness or injury unrelated to your job. You may need to fulfill a waiting period before benefits can be paid. Generally, short-term disability insurance covers periods of six weeks to six months, with premiums often paid by the employer; long-term disability benefits begin once you have exhausted your short-term disability benefits, if applicable. Benefits are then paid for the duration of your medical condition to the maximum duration allowed by your employer’s plan or until you reach Social Security Normal Retirement Age.

If you are, or will be, a caregiver, consider the ramifications if you experience an illness or injury, and you have to replace the care you usually provide for your loved one. More than one in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before they reach the normal retirement age, according the Social Security Administration’s probability tables (PDF) published in October 2017. Nevertheless, life insurance is more readily purchased than disability income insurance.

Ask yourself:

• How high is your risk? Look at your family’s health history and whether or not your personal activities could lead to injuries, especially for musculoskeletal disorders such as arthritis, cancer and mental health conditions such as depression and anxiety, which are some of the most common reasons for long-term disability claims, according to the Council for Disability Awareness (March 2018).

• Would you have savings or other sources of income to cover expenses, during your recovery? For a long-term illness, you might qualify for Social Security Disability Insurance (SSDI), but it can take time to receive a decision after you apply for this benefit.

Retirement plans

People with disabilities and caregivers may delay saving for their own retirement, because day-to-day responsibilities and expenses may seem overwhelming. However, participating in your company’s 401(k) plan may make it easier. Because companies often match some or all of what the employee contributes, your retirement savings can grow more quickly. Plus your contributions are made with pre-tax dollars, reducing your current tax burden. Remember, you must secure your own future first, before ensuring the future of those who are dependent on you.

Ask yourself:

• How much money are you leaving on the table by not contributing at least up to the amount your employer matches? The average 401(k) employer contribution rate, in terms of percentage of salary, reached 4.7% in Q1 2019³.

Employee assistance programs

With services offered standardly at no cost to employees, EAPs offer counseling, referrals, and follow-up services to employees who have personal or work-related difficulties, including alcohol and other substance abuse, stress, grief, family problems, and psychological disorders. Obtaining these services on your own could be a significant cost to you. Some programs also offer legal services to put essential documents in place, such as wills, powers of attorney, guardianship, advance health care and financial directives and trusts.

Ask yourself:

• Are you considering a special needs trust (SNT)? “For certain legal documents, such as an SNT, it’s wisest to use an attorney whose practice serves people with special needs,” says Kurtz. “It’s important to ensure that the wording of all legal documents supports your financial strategy. Planners who serve the special needs community can help a client determine when to use EAP legal services, and when it’s best to use an outside special needs attorney.”

Some final thoughts

Remember, you’ll have the chance to review and make adjustments to your benefits selections during your employer’s annual benefits enrollment period. However, if your current situation changes before then, take a look at the benefits you’ve selected or already have in force. You may be able to make a change. Call your company’s benefits manager to discuss your options.

“Or meet with your financial advisor to review your benefits package,” suggests Kurtz. “Your advisor can help you understand your benefits and how they’ll work with other aspects of your financial plan to fill gaps or supplement it.”

Some workers may worry about having too much deducted from their pay in premiums and savings contributions, but don’t pass up your opportunity to take the fullest advantage of your employee benefits. “You may think you’ll need that income for other things, but it’s not a case of robbing Peter to pay Paul,” says Winters. “You’re robbing from your future, if you don’t take advantage of the employee benefits your company offers.”